Category Archives: U.S. Auto Industry

Rust Wire correspondent Ivy Hughes recently visited Germany’s Ruhr District, a northwestern part of the country recovering from the loss of jobs in of the steel and coal industry. The district includes 53 cites and more than 5.3 million residents. The region is a 2010 European Capital of Culture, an annul EU designation awarded to a city or region for the purpose of showcasing its cultural development. As such, the municipalities within the Ruhr District worked within a €62.5 million budget to create 300 projects and 2,500 events highlighting its cultural assets and efforts to reconstruct an economy devastated by the demise a prominent industrial sector. This three-part series highlights some of the structural, economic and cultural changes a region similar to the Rust Belt in terms of industrial and economic collapse is making to facilitate economic diversification. Her trip was made possible through the Ecologic Institute and sponsored by the German Federal Foreign Office through the Transatlantic Climate Bridge.

Part One: Transforming Industry

Exchanging vows, eating dinner and ice-skating on one of the thousand abandon manufacturing sites in Michigan is an imaginative stretch at best, but it’s an idea and if the Rust Belt needs anything, it’s vision and money.

Michigan has 20,000 abandoned commercial buildings that will remain empty, meet a wrecking ball, or be repurposed for alternative energy, healthcare, film or biotech businesses. Even though some will be repurposed, it’s impractical to suggest emerging industries have the capacity to reinvigorate even one-third of these sites, some of which include millions of acres of contaminated space.

So if industry can’t take it, the wrecking balls are worn out and vacancies red flag potential investors, what else can the state do with the 60,000 square feet to more than 5 million square foot sites?

The state can examine how other regions facing similar challenges have innovated and progressed.

Germany’s Ruhr District is similar to Michigan in that it relied on blue-collar industry for economic stability. In 1960, 670,000 people worked in Ruhr District coalmines. Today, that number sits at about 35,000 but additional job loss is eminent. Three of the remaining six mines are set to close in the next six months, with a final shutdown expected by 2018.

Though Michigan hasn’t been dealing with large-scale job loss for quite as long, the last 10 years have been extremely difficult. According to the American Manufacturing Trade Action Coalition, from 2000 to 2008, the state lost 315,000 manufacturing jobs.

Both regions are reeling from industry specific job loss, but differ greatly in terms of strategic planning, funding sources, government involvement and political cooperation. However, that doesn’t mean Michigan can’t borrow a few things from Germany, specifically as it relates to rehabilitation of abandoned manufacturing sites.

The City of Essen, Germany, the state of North Rhine-Westphalia and the European Union committed to marrying historical preservation and innovation by turning the Zollverein Coal Mine, a 247-acre site with more than 80-structures, into an extraordinary culture center.

The Zollverein Coal Mine was founded in 1847. When it closed in 1986, the North Rhine-Westphalia (NRW) governmental entity, bought the property and memorialized one of the shafts, setting the site up for preservation. In 1993, the cooking plant closed and was slated for sale to China. The deal fell through and rather than demolishing the cooking plant, the NRW pegged it as a future exhibition site.

By 2008, the European Union (36 percent), the City of Essen (2 percent), Germany (6 percent) and the NRW (56 percent) invested approximately €165 million to rehabilitate the site.*

Today, the grisly, iconic structures include a restaurant, museum, outdoor ice rink, café, lecture space, lavish art museum, office space, indoor and outdoor space used for performance art, weddings and other cultural events and outdoor recreational areas, many of which were developed on mine-refuse heaps.

The sheer amount of collaboration involved in preserving such a site is mind boggling, but the way in which developers created cultural cohesion without duplication is striking. Though municipal collaboration in Michigan is improving, it is, at this point, fantastical to believe enough units of government would sideline hubris long enough to plan a project of this magnitude.

The closest thing Michigan has to a manufacturing-site-turned-cultural-center is the old General Motors Centerpoint business campus in Pontiac. Raleigh Michigan Studios purchased the property in 2009 after the state passed ambitious film tax credit legislation. Raleigh Michigan Studios plans to create a 200,000 square foot sound stage for TV and movie production on the site, which is good news for Michigan, but far from a cultural center.

Unlike Germany, Michigan isn’t being tapped to carry the economic weight of failing governments and as such, the financial mechanisms needed for a project like the Zollverein Coal Mine are depressed. The feds are throwing some money at Michigan, but environmental contamination, municipal collaboration and vision quickly derail well-intentioned rehabilitation projects.

In Michigan as in the rest of the states, private sector funding is critical to substantial economic change. While some developers have looked into creating theme parks and/or wetlands on some of Michigan’s abandoned sites, a collision between ideas and the market haven’t occurred.

Though the Zollverein project has brought international attention to Essen, it’s unrealistic to assume a replication of the Zollverein rehabilitation would be economically viable on a similar site in the Ruhr region. The Zollverein has vacant offices spaces and it’s hard to imagine that the massive rooms set aside for cultural events — art, dance, performance — will ever fill, but it’s an idea.

What do you think? We’ve got a lot of collective brainpower amongst our readers, I am curious to hear people’s thoughts. Also, what policies enacted by Obama and the Democratic Congress have benefited this region? The auto bailout? Extended unemployment benefits? Funds for the Great Lakes? Also, what does this mean for 2012?

On a related note, this article points out the election marks a major departure of members of Congress who have helped secure funds and protection for the Great Lakes.

“Rep. Bart Stupak, D-Mich., the first member of Congress to introduce legislation banning oil and gas drilling under the Great Lakes, is retiring. So is Rep. Vernon J. Ehlers, R-Mich., a leader in Great Lakes protection. Sen. George V. Voinovich, R-Ohio, a Great Lakes advocate on the other side of the Capitol, is retiring, too,” the story notes.

The recent murders of Realtor Vivian Martin on the East Side and elderly residents Thomas Repchic and Angela Figmonari on the South Side near St. Dominic’s church are especially hard on a city that seemed to be focusing on the positives. Earlier this year we were able to celebrate the long list of jobs coming to the area including a third shift at GM Lordstown and the V&M Steel expansion. This month a Brookings Institute report has Youngstown leading the nation in manufacturing job growth. This good news is overshadowed by the senseless violence of 18 murders committed this year.

Real estate agent Vivian Martin was killed last week in a robbery in Youngstown.

It’s bad enough the city is subjected to a high homicide rate due to drug related crimes. Now residents are forced to endure the murders of elderly church members and successful business owners. Vivian Martin should have been an inspiration. From the follow up article in the Vindicator it is clear she was a driven, educated black woman who owned a successful business in a city that needs such role models. That she would be targeted because her profession leaves her vulnerable when showing properties shows the cowardly nature of the men who attacked her. The assaults on Angela Figmonari and Thomas Repchic and his wife were equally cowardly, occurring after services at St. Dom’s.

The criminals in the Martin and Figmonari cases are young, uneducated and apparently faced a life without prospects of success beyond crime. Even as the Mahoning Valley sees a good turn in a grim economy we see the same lazy-gonna-blame-everyone-else-for-my-failure elements we always have making it harder for those who are struggling to become educated or those who are trying to work honestly.

Youngstown can succeed but it has to want it. People need to make sure their kids are learning in school in order to set up a good foundation for moving on to YSU or one of the trade schools in the area. We can no longer accept crime and criminals as the status quo. Otherwise businesses will look at the city and locate near it but not in it. Daylight murders of good people kill more than the victims

Before Youngstown advocates come after me, I like this post because it demonstrates the kind of two steps forward, one step back, dynamic that is taking place in Youngstown and other Rust Belt cities.

It’s an uphill battle. And Youngstown’s increase in manufacturing jobs will improve things, but it will take while before new jobs produce the type of community benefits they promise. In the meantime, there’s a certain portion of the population that hasn’t yet benefited from the remarkable progress that has been made and their suffering is going to continuing to haunt the region for the foreseeable future. That’s not to excuse these heinous crimes. I think that’s just the reality in some of the nation’s poorest cities during an historic recession.

Anyway, those who are working for progress shouldn’t be discouraged even though their task is so daunting. Situations like this one highlight the serious consequences of past inaction.

Who is benefiting from the strides being made to redevelop the city of Youngstown?

That is the question posed by Center for Working Class Studies at Youngstown State University, in a critical article titled “A Renaissance for Whom?”

The authors point out that despite the success of high-tech start-ups in the city’s downtown, the average city resident has seen her fortunes decline during the current recession. And the situation wasn’t pretty before that.

“Much has been written recently about Youngstown’s Renaissance,” write YSU professors James Rhodes and John Russo on the CWCS’s blog. “Fox News, BBC, The Economist, Entrepreneur, and Inc. have all touted the local area as recovering economically.

“While all the publicity and positive representations have been great for the city’s self-image and provided much-needed momentum for economic development, both local leaders and most journalists have ignored the city’s real problems: high unemployment, poverty, continued high crime rates, and the deterioration of the Youngstown’s neighborhoods.”

Rhodes and Russo point out that Youngstown’s Metropolitan Statistical Area has lost a net total of 9,000 jobs since the recession began. In March, the local unemployment rate hovered at 14 percent, among the highest in the state.

“The Mahoning Valley, like the nation at large, is in the midst of major social and economic upheaval,” they write. “Long-term unemployment contributes to drug abuse, crime, domestic violence, health problems, the break-up of families, and racial antagonisms. Community support institutions are besieged by requests for help even as their economic support – whether from donations or state funds – is declining.”

Rhodes and Russo are absolutely right and their point is important to keep in mind. People are suffering in Youngstown. I’m not sure that diminishes the city’s success in certain initiatives–downtown revitalization and technology-based economic development–although it’s obviously troubling.

I think everyone hopes that someday these developing areas of strength will reach the point where they have a recognizable effect on unemployment, poverty and the associated ills. Perhaps Russo and Rhodes’ point is that the benefits won’t be as widely distributed as was the case with a manufacturing based economy. That may be true. There’s a certain paradox in progress, I guess.

For years, environmentalists have pushed for the development of green and energy-efficient technologies as a way to curb climate change and prevent a future ecological catastrophe.

But Thursday morning, speaking to the Center for American Progress, a left-leaning D.C.-based think tank, Michigan Governor Jennifer Granholm said that focusing on global warming is the wrong message — if you really want to grab Americans’ attention, focus on the economic opportunities in a greener economy — especially for auto-dependent areas.

“The bottom line is, that if we’re not talking about jobs, then it’s not going to resonate across the country,” Granholm said, speaking to about 100 people in the CAP’s downtown office. “Maybe that’s just my view as a governor from the industrial Midwest.”

Granholm was in D.C. to celebrate the one-year anniversary of a $1.35 billion grant towards Michigan’s burgeoning advanced energy storage industry. According to Granholm, 16 new lithium battery plants — these are the batteries that go into hybrids and electric cars — will create 62,000 in the next ten years. Last week, President Obama traveled to Holland, Mich., to tout one of these new plants as a “symbol of where America is going.” (You can read more about the investment, and Obama’s visit, in this New York Times story, as well as this page from Michigan Advantage.

Perhaps buoyed by the lack of an election in her future — term limits prevented her from running for a third term as governor — Granholm was energetic, jovial, and emotional during the hour-long presentation Thursday morning. Wearing a red and black suit with open, high-heeled sandals and a large BlackBerry strapped to her belt — (the BlackBerry eventually became a prop when she discussed lithium batteries) — Granholm ignored the podium and paced dramatically back and forth while touting the battery industry and describing the challenges she faced during her first few years in office.

“Thank God I don’t have to run again,” Granholm joked after accidentally stumbling onto an eyebrow-raising double entendre. (It involved the word “member.”)

Occassionally, her voice cracked — such as when she recalled when Electrolux closed its refrigerator plant in Greenville, the tiny central Michigan town which was once known as the “Refrigerator Capital of the World.” She said that experience — as well as other massive job losses which occurred this decade — made her realize that Michigan must take advantage of its skilled professional workforce to retool its economy, and focus on clean energy as the world looks for alternatives to carbon-based machinery.

“Every single state has seen this shift in manufacturing jobs,” Granholm said. ‘We need all kinds of jobs, for all kinds of people. We are completely turning our back on this manufacturing opportunity and heritage.”

When asked by an audience member about recent Congressional efforts to pass stricter carbon standards and other environmental efforts, Granholm’s responded that we need to “get off the debate about whether global warming is occurring.” That provoked laughter and some applause–although it’s not clear that the audience realized what she meant.

Granholm also added that no matter who wins the election to succeed her, she feels that the state will move forward on this issue.

On Tuesday, Republican businessman Rick Snyder and Democrat Virg Bernero — the mayor of Lansing — won their parties’ nomination for the governor’s race.

Without mentioning either by name, Granholm praised their “strong” positions on clean energy development, and claimed that both would move the state forward.

“There’s a sense that we cannot turn back,” Granholm said. “In fact, in Michigan, there’s nowhere to turn back to.”
For years, environmentalists have pushed for the development of green and energy-efficient technologies as a way to curb climate change and prevent a future ecological catastrophe.

But Thursday morning, speaking to the Center for American Progress, a left-leaning D.C.-based think tank, Michigan Governor Jennifer Granholm said that focusing on global warming is the wrong message if you really want to grab Americans’ attention, focus on the economic opportunities in a greener economy especially for auto-dependent areas.

“The bottom line is, that if we’re not talking about jobs, then it’s not going to resonate across the country,” Granholm said, speaking to about 100 people in the CAP’s downtown office. “Maybe that’s just my view as a governor from the industrial Midwest.”

Granholm was in D.C. to celebrate the one-year anniversary of a $1.35 billion grant towards Michigan’s burgeoning advanced energy storage industry. According to Granholm, 16 new lithium battery plants these are the batteries that go into hybrids and electric cars will create 62,000 in the next ten years. Last week, President Obama traveled to Holland, Mich., to tout one of these new plants as a “symbol of where America is going.” (You can read more about the investment, and Obama’s visit, in this New York Times story, as well as this page from Michigan Advantage.)

Perhaps buoyed by the lack of an election in her future term limits prevented her from running for a third term as governor Granholm was energetic, jovial, and emotional during the hour-long presentation Thursday morning. Wearing a red and black suit with open, high-heeled sandals and a large BlackBerry strapped to her belt (the BlackBerry eventually became a prop when she discussed lithium batteries) Granholm ignored the podium and paced dramatically back and forth while touting the battery industry and describing the challenges she faced during her first few years in office.

“Thank God I don’t have to run again,” Granholm joked after accidentally stumbling onto an eyebrow-raising double entendre. (It involved the word “member.”)

Occassionally, her voice cracked such as when she recalled when Electrolux closed its refrigerator plant in Greenville, the tiny central Michigan town which was once known as the “Refrigerator Capital of the World.” She said that experience as well as other massive job losses which occurred this decade made her realize that Michigan must take advantage of its skilled professional workforce to retool its economy, and focus on clean energy as the world looks for alternatives to carbon-based machinery.

“Every single state has seen this shift in manufacturing jobs,” Granholm said. ‘We need all kinds of jobs, for all kinds of people. We are completely turning our back on this manufacturing opportunity and heritage.”

When asked by an audience member about recent Congressional efforts to pass stricter carbon standards and other environmental efforts, Granholm’s responded that we need to “get off the debate about whether global warming is occurring.” That provoked laughter and some applause although it’s not clear that the audience realized what she meant.

Granholm also added that no matter who wins the election to succeed her, she feels that the state will move forward on this issue.

On Tuesday, Republican businessman Rick Snyder and Democrat Virg Bernero the mayor of Lansing won their parties’ nomination for the governor’s race.

Without mentioning either by name, Granholm praised their “strong” positions on clean energy development, and claimed that both would move the state forward.

“There’s a sense that we cannot turn back,” Granholm said. “In fact, in Michigan, there’s nowhere to turn back to.”

Cleveland Housing Court Judge Raymond Pianka is making news again for his aggressive stance on dilapidated properties- especially those purchased by people outside of Cleveland and hoping to make a quick buck.

The Plain Dealer reports he is ordering absentee owners of vacant homes to pay restitution to neighbors whose property values have been eroded by the vacant structures nearby.

“What is happening (in Cleveland) is certainly at the forefront of initiatives seeking to impose liability upon the owners of substandard properties,” Frank S. Alexander, a professor at Emory University School of Law and general counsel for the Center for Community Progress, told The Plain Dealer.

I’m excited to see Changing Gears, an NPR project about “Remaking the Manufacturing Belt” is up and running. Changing Gears aims to “report on a major developing story–the transformation of the Upper Midwest’s industrial-based economy to a post-manufacturing one. This transition is a turning point in the American economy with economic, social, environmental and cultural implications,” its web site states.

I had heard some rumblings about this project awhile ago so I’m glad to see it is off to a good start.

The project is “a product of the Upper Midwest Local Journalism Center, created through a grant from the Corporation for Public Broadcasting. Its host stations are Michigan Radio in Ann Arbor, Chicago Public Radio and ideastream in Cleveland, the parent of WVIZ-TV and 90.3 WCPN,” according to its web site.